You are here: Home > articles > Forex > Forex Market Review (Asian Session) – Dollar faces tailwinds on 2018 fiscal budget approval; kiwi plummets as economic risks grow
Forex Market Review (Asian Session) – Dollar faces tailwinds on 2018 fiscal budget approval; kiwi plummets as economic risks grow
October 20, 2017 8:25 amVideo
Latest News
- EUR/USD: trading scenarios on April 11, 2024 April 11, 2024
- Analysis and trading tips for USD/JPY on April 11 (US session) April 11, 2024
- Analysis and trading tips for GBP/USD on April 11 (US session) April 11, 2024
- Analysis and trading tips for EUR/USD on April 11 (US session) April 11, 2024
- Technical Analysis – USDCAD surges to new almost 5-month high April 11, 2024
- Technical Analysis – EURGBP’s double bottom still waits for confirmation April 11, 2024
- Technical Analysis – US 30 index slides below 50-day SMA April 11, 2024
- Video market update for April 11, 2024 April 11, 2024
- EUR/USD. April 11th. Fed minutes: inflation concerns persist April 11, 2024
- GBP/USD. April 11th. The US inflation report shocked the bulls April 11, 2024
- Technical Analysis – USDCHF unlocks 6-month high April 11, 2024
- Overview of the GBP/USD pair on April 11, 2024 April 11, 2024
- Overview of the EUR/USD pair. April 11th. The market couldn’t hold up after the inflation report April 11, 2024
- Analysis and trading tips for USD/JPY on April 11 April 11, 2024
- What’s behind the US economy’s resilience? – Special Report April 11, 2024
- Technical Analysis – AUDUSD plummets in the US CPI aftermath April 11, 2024
- Technical Analysis – WTI oil pauses rally but remains supported April 11, 2024
- Market Comment – Dollar surges across the board on hot inflation data April 11, 2024
- EUR/USD and GBP/USD: Technical analysis on April 11 April 11, 2024
- Key events on April 11: fundamental analysis for beginners April 11, 2024
The approval of a budget blueprint for the 2018 fiscal year, drove the dollar higher against its major counterparts on Friday in Asia, while the kiwi extended its losses in the face of economic uncertainties which might emerge under the new coalition government.
Trump’s tax plan, which promises substantial tax cuts to businesses and individuals, is ready to move to the House of Representatives after the Republican-controlled Senate voted in favor of the 2018 fiscal budget yesterday which would add $1.5 trillion to the federal deficit over the next decade in order to fund the tax cuts. The good news for the Republicans now is that the Senate approval unlocked a key legislative tool needed for them to pass the tax package through Congress without support from the Democrats. With hopes to pass the bill by December, Trump’s team will work harder to submit a House-version tax draft by early November.
In other news, Trump has completed his interviews with the five candidates considered for the role of Fed chair on Thursday, with sources familiar with the matter saying that a decision could be announced as soon as next week.
During the session, the dollar gained 0.26% on the day against its major peers, with the index last trading at 93.52. Looking at dollar pairs, dollar/yen hit a two-week high at 113.31 ahead of the Japanese elections on Sunday, while dollar/swissie touched a five-month high of 0.9847.
In New Zealand, the formation of the new coalition government consisted of the Labour party and the small New Zealand First, raised fears that stricter policies on immigration and foreign investments would be imposed, hurting the outlook for the kiwi. The kiwi, which recorded the worst performance among G10 currencies this month, made a fresh five-month low of $0.6970 on Friday.
On late Thursday, the German Chancellor, Angela Merkel expressed their support to the British Prime Minister, Theresa May, during the EU summit in Brussels that concludes today, raising hopes that Brexit talks could progress to the second stage, reaching an EU-UK trade deal. Particularly, Merkel said “that there are no indications at all” that Brexit negotiations won’t succeed, suggesting that trade talks could start at the next EU summit in December.
Despite those comments, the pound failed to gain ground as doubts on monetary policy and specifically on whether the BOE would proceed with a rate hike in November weighed on the currency after the release of disappointing economic data out of the UK early this week. The pound retreated by 0.22% against the greenback, last seen at $1.3131.
The euro declined by 0.30% to $1.1817 as the Spanish Prime Minister, Mariano Rajoy, prepares to hold a cabinet meeting on Saturday that could activate Article 155 and therefore suspend Catalonia’s autonomy. This arose after the Catalan leader, Charles Puigdemont, refused for the second time on Thursday to renounce “symbolic” independence and said instead he would proceed with a formal declaration if the Spanish government continues to refuse to engage in dialogue.
The loonie climbed by 0.20% ahead of Canadian inflation data due later today.
Turning to commodities, gold tumbled by 0.56% to $1,281.90 per ounce on the back of a stronger dollar, while oil prices moved higher as well amid signs of tightening supply. WTI crude jumped by 0.55% to $51.57 per barrel and Brent rose by 0.42% to $57.47.
Related Posts: